Unemployment Compensation

[shadowmaster]

A young person I know is collecting over $600/ month for not working. It will last for 2 years and she has no intention of landing a job in the meantime. She never worked more than 1/2 time and seldom made that in a week.

Is this supposed to be an incentive to work?
Any opinions as why this is done?

SM

[One Bad Pig]

It's an incentive for said young person to vote for whomever keeps her unemployment benefits coming.

[Cow Poke]

For the first time in my life, I am collecting unemployment. I receive the maximum allowed amount in my state - $415 / week. The rules (or conditions) seem to oppose making any extra money, and the system does NOT seem set up to encourage finding a job.

I know it varies from State to State, but it seems that unemployment compensation has become a "hook" to keep people dependent upon the state.

I used to be VERY opposed to unemployment, and have never collected it in my life. I have been "between jobs" before, but I have never been "out of work". I have always found something to do.

Now that I'm nearly 60 years of age, it's harder and harder to find something decent, particularly in this economy.

But, at the risk of being a cynic, it appears that the whole welfare / unemployment compensation thing is designed to keep people on the plantation, so to speak.

[RBerman]

Read Hazlitt's Economics in One Lesson. Your wage is the difference between how much you get paid to work, and how much you get paid not to work. With wages so low, the incentive to work is very low. This causes wealth production to decrease, resulting in a scarcity of production which raises the cost of goods and services.

[shadowmaster]

So even though our leaders know that extending the unemployment compensation will discourage people from getting jobs, they still do it?

What does that say about them?

SM

[RBerman]

So even though our leaders know that extending the unemployment compensation will discourage people from getting jobs, they still do it? What does that say about them?

And what does it say about us, that we keep re-electing them?

[shadowmaster]

I don't.

I say 'throw the bums out."

All of them

[Littlejoe]

Unemployment was meant to be a temporary help until you could find a replacement job for the one you lost. I have been on unemployment twice in the last ten years, both times for approx. 4-5 months. I worked hard at getting a new job though! I spent 5-6 hours a day looking for work, applying for jobs and networking. I wouldn't have made it without it. But I never treated it as a reason to sit on my backside and do nothing. There are certainly ways to milk it for all its worth though...

[rogue06]

So even though our leaders know that extending the unemployment compensation will discourage people from getting jobs, they still do it?

What does that say about them?

SM

But, but, but Nancy Pelosi assures us that unemployment checks “creates jobs faster than almost any other initiative" and "is one of the biggest stimuluses to our economy”

[OneFollowingHim]

And what does it say about us, that we keep re-electing them?

You might like this website.

[shadowmaster]

But, but, but Nancy Pelosi assures us that unemployment checks “creates jobs faster than almost any other initiative" and "is one of the biggest stimuluses to our economy”

because she wants the votes

[shunyadragon]

So even though our leaders know that extending the unemployment compensation will discourage people from getting jobs, they still do it?

What does that say about them?

SM

You are assuming that at present unemployment compensation discourages people from getting jobs. In our present economy there are not jobs available to be discouraged from.

In my case, I returned from China (9 years) in 2006 for a job. When I arrived the job was not there. I got a six month job as an OSHA supervisor (from my previous work experience as a geologist). It was a contract job not employment. Since then I have not been able to get a job. I was never eligible for unemployment benefits, I have worked since that time on my own doing whatever people are willing to pay me to do, such as carpentry, auto mechanics, plumbing and electrical work.

I have many friends unemployed from many different fields, and there is just no employment opportunity for them. The unemployment some not all receive is insufficient to pay their way except to eventual bankruptcy.

[shadowmaster]

You are assuming that at present unemployment compensation discourages people from getting jobs. In our present economy there are not jobs available to be discouraged from.

In my case, I returned from China (9 years) in 2006 for a job. When I arrived the job was not there. I got a six month job as an OSHA supervisor (from my previous work experience as a geologist). It was a contract job not employment. Since then I have not been able to get a job. I was never eligible for unemployment benefits, I have worked since that time on my own doing whatever people are willing to pay me to do, such as carpentry, auto mechanics, plumbing and electrical work.

I have many friends unemployed from many different fields, and there is just no employment opportunity for them. The unemployment some not all receive is insufficient to pay their way except to eventual bankruptcy.

You did not read the op or you would realize that for many young people this is not so.
There are many jobs for them but the incentive is for them not to take them until the unemployment $$ run out.
It's not rocket science, Shuny.

OTOH, I know that higher priced people are having a hard time, my relatives included.
The compensation helps but is not adequate.
It puts some food on the table but does not cure our current economic woes.

sm

[RBerman]

You are assuming that at present unemployment compensation discourages people from getting jobs. In our present economy there are not jobs available to be discouraged from.

1) "People are discouraged from seeking work by low wages" is a distinct issue from "No jobs were available."

2) The availability of jobs depends on the cost of acquiring the work. When people are paid not to work, the wage necessary to induce them work may equal or exceed the value of the wealth produced by the work. In such cases, the business owner has no incentive to expand production, and the supply of jobs decreases.

[shadowmaster]

1) "People are discouraged from seeking work by low wages" is a distinct issue from "No jobs were available."

2) The availability of jobs depends on the cost of acquiring the work. When people are paid not to work, the wage necessary to induce them work may equal or exceed the value of the wealth produced by the work. In such cases, the business owner has no incentive to expand production, and the supply of jobs decreases.

Good points. The person I spoke of in the OP is a community college student on a federal grant. The $600 per month may as well be considered another grant because she cannot afford to work (say) 20 hours/week and lose that $600+ (it is actually over $640.)

I wonder how many other students are doing the same thing.


SM